PayPal recently announced it will discontinue its fundraiser tool on the app, ending a service that allowed users to raise money for personal causes directly on the platform. Launched initially to enable small-scale fundraising, this tool gave users a convenient way to support family or community needs.
Critics and industry observers note this decision could stem from factors such as compliance challenges, operational costs, or a strategic shift to differentiate PayPal from crowdfunding competitors like GoFundMe.
Key Takeaways
- End of Fundraisers Feature: PayPal announced it is phasing out its in-app fundraising tool, stopping new campaigns as of October 7, 2024, and requiring funds to be withdrawn by January 12, 2025.
- Alternative Fundraising Options: PayPal encourages users to shift to its Generosity Network for broader reach or use PayPal.Me for more private fundraising, providing alternatives to support individual or community needs.
- Focus on Charitable Giving: Despite the feature removal, PayPal remains committed to charity through the PayPal Giving Fund and partnerships, allowing users to donate directly to verified nonprofits without transaction fees.
- Strategic Shift and Compliance: The decision to focus on official charitable giving channels may align with regulatory, operational, or strategic goals, differentiating PayPal from crowdfunding-only platforms like GoFundMe.
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PayPal Discontinues Fundraisers Feature, Redirecting Users to Alternative Options for Charitable Giving
In October 2024, PayPal announced discontinuing its “Fundraisers” feature within the app, which previously allowed users to launch fundraising campaigns for personal causes or charities. Starting October 7, users cannot start new campaigns, and active fundraisers will conclude by the end of October. Users are required to transfer their collected funds to their personal PayPal accounts by January 12, 2025. After this date, PayPal will automatically move any remaining funds.
A PayPal spokesperson explained that the decision to end the Fundraisers feature is part of an effort to refine and advance their service offerings. The spokesperson highlighted that customers still have multiple options to support charities, including using the ‘donate’ button in the app, which connects them to over a million charitable organizations.
PayPal suggests that users who previously used the Fundraisers tool for more minor or individual causes should consider switching to the Generosity Network for a wider audience or utilizing direct payment methods like PayPal.Me for more private fundraising efforts.
PayPal’s fundraising feature once functioned similarly to GoFundMe, enabling users to raise money for personal causes like medical bills or sudden financial challenges directly within the app. For instance, one campaign was created by a user recovering from a serious motorcycle accident caused by a teenager driving an SUV at high speeds.
The tool provided options to publicly share fundraisers for a fee or privately to a select group without cost, catering to those who preferred privacy or wider exposure. However, unlike GoFundMe, which focuses solely on fundraising, PayPal’s broader array of financial services may have influenced its decision to phase out this feature. Despite this change, PayPal maintains its commitment to charitable activities, collaborating with reputable charities and integrating with Meta platforms for fee-free donations to nonprofit organizations, thus ensuring greater visibility for these causes.
The elimination of the individual fundraising feature might be due to regulatory concerns and PayPal’s strategic shift towards facilitating more organized, official forms of charitable giving. PayPal continues to support fundraising through mechanisms like the PayPal Giving Fund and tailored donation processes that allow users to contribute to a large network of vetted nonprofits. When donations are made through PayPal’s platform, the company absorbs all transaction fees (provided there’s no currency exchange), ensuring that 100% of donations go directly to the charity.
Receiving Donations Through the PayPal Fundraiser Tool
Charities engaged with PayPal Fundraisers will see their donation receipt process vary depending on whether they are enrolled with the PayPal Giving Fund (PPGF).
- Enrolled Charities:
These charities have a PayPal business account and have accepted PPGF’s terms. Donations are deposited directly into their PayPal accounts, usually around the 25th of each month. This schedule includes funds collected from the 16th of the previous month to the 15th of the current month.
The transfer method is electronic, which is quick and ensures funds are available without significant delays. Enrolled charities can also monitor their donations via a dashboard in their PayPal account.
- Unenrolled Charities:
While not enrolled, these charities still receive funds collected by PPGF as long as they are verified for tax-exempt status through databases like GuideStar. For these charities, donations are sent as physical checks to the address registered with GuideStar, typically within 90 days of the donation. Should issues arise with the address or if checks are returned, PayPal might redirect these funds if the charity does not respond or update its information timely.
Charities not yet enrolled are advised to consider enrollment to benefit from quicker, more secure payment processing and enhanced tracking capabilities, including access to donor information where allowed. While enrollment is not mandatory, it greatly aids in the efficient receipt of funds from PPGF.
About PayPal
PayPal Holdings, Inc. provides a global platform supporting digital payments for merchants and consumers. This system allows users to send and receive payments online or in person, drawing from various funding sources such as bank accounts, PayPal or Venmo balances, credit and debit cards, and even cryptocurrencies.
PayPal operates a two-sided network that links consumers and merchants, enhancing payment efficiency and convenience. It offers a range of services under brands like Braintree, Xoom, Zettle, and Hyperwallet in addition to PayPal and Venmo. Founded in 1998, PayPal’s headquarters are in San Jose, California.​
Conclusion
The discontinuation of PayPal’s fundraiser feature represents a shift in the company’s approach to personal fundraising and reflects a focus on streamlining its core services. While users may no longer launch personal campaigns directly on the platform, PayPal offers alternative options through tools like the Generosity Network and direct donation methods.
These channels allow individuals and organizations to continue supporting charitable causes in ways that align with PayPal’s updated service model. Through collaborations with vetted nonprofits and the PayPal Giving Fund, PayPal remains committed to facilitating charitable giving on a larger scale, aiming to meet regulatory standards while providing transparency and efficiency for both donors and beneficiaries.
